The Analogy Application Of Article 167 Of The Contract Law In The Equity Transfer Contract

Article 167 of Chinese Contract Law deals with the seller's right of termination of installment sales contracts.Its legislative policy is to protect the rights and interests of consumers.However,as the only one of the current legislation in our country about installment sales contracts,the provisions of Article 167 of the Contract Law have some contradictions with its legislative purpose of consumer protection.The seller's right of termination stipulated in this clause is gentler than the general statutory right of termination in the Contract Law.And this clause does not make clear that it will restrict the agreement which is harmful to the consumers.It fails to achieve the intended purpose of consumer protection,and can even injure the interests of consumers if it is overused by the seller.As a result,many contradictory cases arise when applying Article 167 of the Contract Law.The No.67 Guiding Case which involves the right of termination of the seller in the equity transfer contract published by the Supreme People's Court fully demonstrates this major drawback of Article 167 of the Contract Law.Chinese Company Law and its judicial interpretation do not specifically regulate the termination of the equity transfer contract.Therefore,when handling the termination of the equity transfer contract,the courts often refer to provisions on the termination of the contract in Contract Law to resolve relevant issues.The Supreme People's Court establishes the value proposition of consumer protection of Article 167 of the Contract Law in the No.67 Guiding Case,and specifically limits the scope of application of this clause to consumer contracts.Thereby it excluding the seller's rightto terminate the equity transfer contract in accordance with Article 167 of the Contract Law parties when buyer's remaining unpaid money reaches one fifth of the total price of the contract.No.67 Guiding Case is not properly explained and there are many drawbacks in this case.One of the most criticized drawback is that this case narrow the explanation of Article 167 of the Contract Law,which goes beyond the scope of such clause.The contradiction between judgments and reasoning in No.67 Guiding Case is that it restricts parties in the equity transfer contract from analogy applying the clause based on the value position of consumer protection of Article 167 of the Contract Law.So the result that the Article 167 of the Contract Law whose conditions of termination are gentler and easier to reach can apply to consumers,the Article 94 of the Contract Law whose conditions of termination are more stringent and difficult to reach can apply to non-consumers arises.Under the same circumstances,the degree of protection to consumer is lower than the equity transferors which is contrary to the original intention of consumer protection.The root cause of this result is that the value position of Article 167 of the Contract Law actually is seller protection rather than consumer protection.The value position of seller protection can reasonably explain the judgement of No.67 Guiding Case.Based on the value position of seller protection of Article 167 of the Contract Law,we can find the important feature of prior delivery of the subject matter of the installment payment institute and find that the equity transfer contract in No.67 Guiding Case does not meet this feature,thus excluding the analogy application of Article 167 of the Contract Law.It is also precisely that No.67 Guiding Case which based on the value position of consumer protection shall be excluded the application of Article 167 of the Contract Law which based on the value position of seller protection because of the difference in value position.